Marathon Oil, Chevron Ink Equatorial Guinea Gas Mega Hub Deal

Petroleum company, Marathon Oil, through its affiliated company, Marathon E.G., has signed a Heads of Agreement with Noble Energy and Equatorial Guinea to proceed with the development of the second and third phases of the gas mega hub (GMH) initiative. Announced on 30 March, the agreement builds on the success of the project’s first phase, which was achieved with the tieback of the Alen Field situated in the Gulf of Guinea to the Punta Europa Liquefied Natural Gas (LNG) Terminal on Bioko Island, which delivered first gas in February 2021. 

“We are excited about this critical milestone in this ongoing development of Punta Europa as a world-class hub for the monetization of local and regional natural gas,” stated Marathon Oil President and CEO Lee Tillman adding, “The Government, represented by the Ministry of Mines and Hydrocarbons, has taken an active role in leading the successful implementation of this GMH expansion and is committed to ensuring subsequent activities and negotiations progress in a timely manner.”

Phase II of the GMH expansion project will involve processing gas from the Alba Field from 1 January 2024 under new contractual terms following the expiration of the Henry Hub-linked Alba sales purchase agreement at the end of the year. Marathon Oil expects Phase II to improve its earnings and cash flow in Equatorial Guinea while increasing the firm’s exposure to global LNG pricing.

Meanwhile, Phase III will facilitate gas processing from the Noble Energy-operated Aseng oil and gas field, offshore Equatorial Guinea, at the Punta Europa facilities.

“This announcement builds on our successful partnership of more than 20 years with the government, further leveraging and extending the life of Equatorial Guinea’s world-class gas monetization infrastructure, including the critical Equatorial Guinea LNG facility, into the next decade,” Tillman added.

Furthermore, a recently established bilateral trade agreement between Equatorial Guinea and Cameroon on cross-border oil and gas development, signed on 17 March, will provide opportunities to further expand the GMH project through the mobilization of transborder wet gas fields.